What to know about buying a car for your teenager

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Published on February 23, 2024 | 5 min read

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Smiling girl and her father looking at car in showroom, girl pointing at car

Key takeaways

Setting expectations with your teen for the car buying process can help to eliminate disappointment and reduce stress.
Shop based on your budget and vehicle safety. Consider costs beyond the purchase price of the car, like fuel and repairs.
Looks for ways to save, like car insurance discounts if your teen takes a drivers’ ed course.

You likely remember the excitement of buying your first car. But now that you’re the parent of a new driver, your focus will be less on the vehicle’s sound system and more on its safety, reliability and affordability.

Whether you purchase a new or used vehicle, there are some things to know about buying a car for your teenager. These tips will help you balance safety, reliability, affordability and your new driver’s excitement when car shopping.

7 tips for buying a car for your teenager

Whether you plan to buy a car from a dealership or a private owner, it’s important to be prepared. Here are some things you can do to prepare and be a confident shopper.

1. Set expectations in advance

Buying your teen’s first car is an exciting occasion for both parties. But before heading to the lot, set and communicate expectations for the vehicle and the buying process. Here are a few expectations to consider setting:

Vehicle budget. If you have $10,000 to spend, you don’t want your teen looking at $30,000 vehicles. Discuss this as early as possible to avoid disappointment.
Vehicle type. If you have determined you want your teen to drive a sedan instead of a sports car, let them know upfront.
Responsibilities of owning a vehicle. This includes vehicle maintenance and keeping track of important documentation.
Responsibilities of operating a vehicle. This includes rules like no speeding, no using mobile devices while driving, and no other law violations.

This conversation doesn’t need to be a lecture. It should instead be a dialogue outlining the responsibilities of owning and operating a vehicle.

2. Invest in driving school

Drivers’ education classes are mandatory for young drivers in 37 states. But even if the classes are not required in your state, consider having your teen complete one before getting behind the wheel. This will help to ensure your teen knows the rules of the road and understands driver safety.

As a bonus, you may also get a car insurance discount if your teen completes a course.

3. Shop for safety

Getting a safe car is essential. Teen drivers between the ages of 16 and 19 are three times more likely to crash per mile driven than older drivers according to the Centers for Disease Control and Prevention.

Avoid V-6 engines with faster speeds.
Don’t assume bigger is better. A larger vehicle may be more difficult to handle and is more likely to seriously injure or kill pedestrians.
Look for safety features like airbags, anti-lock brakes, and electronic stability control.
Review vehicle safety ratings.

Bankrate tip

Check out crash test results on the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety’s websites.

4. Consider whether used or new is better

Consider the following pros and cons when deciding the best car to purchase for your teen:

	Buying used	Buying new
Cost	Used cars sold for $26,446 on average in December (Kelley Blue Book).	New cars sold for $47,401 on average in January (Kelley Blue Book).
Safety	Depending on the model year of the used vehicle, it may not have the safety features you want. Aim to purchase a vehicle made after 2018, as most will have a backup camera.	Many newer vehicles boast advanced safety features such as lane assist or blind spot monitoring.
Insurance	Insurance is less expensive for a used car, even with a teen driver.	New vehicles tend to carry higher insurance premiums than their used counterpart.

5. Check used cars for quality

Used car prices are typically significantly cheaper. However, putting a teen in a car that has not been well-maintained can lead to disastrous results.

So, if you opt for a used car, check it over thoroughly before buying. Go for certified preowned or ask a National Institute for Automotive Service Excellence-certified mechanic to do a thorough used car inspection to confirm it’s in good condition before you buy.

6. Share the costs

It may not be possible for your teen to contribute much towards the purchase price, but there are other ways to split the cost of owning the vehicle. This approach should give your teen a greater sense of responsibility and pride for the vehicle, as they now have a financial stake.

But before you buy, work out what your teen will cover. This can include maintenance costs, gas, and insurance. Make it clear whether your teen will be partially or wholly responsible for any expenses, and keep communication open.

Bankrate tip

If your teen is covering the purchase price and is over the age of majority, they might qualify for a first-time car buying program.

7. Opt for teen-friendly features

Some cars offer safety features specifically geared toward teen drivers, like backup cameras. Visit the National Highway Traffic Safety Administration’s website to view safety ratings on cars you’re considering.

Also, look for a fuel-efficient car to reduce the cost at the pump. If your child needs the car for school, sporting events and visiting potential colleges, fuel costs can add up fast. When college time rolls around, your child will likely thank you for helping them select a fuel-efficient ride.

How much should I spend on a car for my teenager?

The right amount to spend on a car for your teen will be different for you than for someone else. Experts recommend that your car expenses not exceed 20 percent of your take-home pay. That includes monthly payments, insurance, gas and maintenance.

If you already have one or more car payments, the amount you can afford for an additional car shrinks.

First, determine how much car you can afford for your teen. If the out-the-door price of the car you’re considering is at or below budget, use a cost-to-own tool to estimate expected costs.

Research costs beyond the purchase price

You want the best deal on your teenager’s first car to maximize your dollar. But you need to factor in costs beyond the purchase price to avoid surprises later down the line.

Here are some other costs to be mindful of:

Car loan fees and interest rates: Ask your lender about car loan interest rates and other fees that you’ll be responsible for paying.
Gasoline: Fuel costs vary by location, but you can view estimated annual potential costs by year, make and model on the U.S. Department of Energy’s fuel economy site.
Maintenance and repairs: Use Edmunds car maintenance calculator to estimate maintenance costs on the vehicle you’re considering.
Auto insurance: Speak with your insurance agent to understand how much it’ll cost to cover your teenager under your policy. And don’t hesitate to shop around if the number they give seems too high.

The bottom line

Buying your teen’s first car doesn’t have to be stressful. Consider involving your teen when it’s time to shop so they understand the purchase process and the costs associated with owning a car. They’ll gain knowledge that can help them when it’s time to buy a car on their own.